Saturday, July 14, 2012

Steps to a Louisville Kentucky VA Loan

Steps to a Kentucky VA Loan

Determining Eligibility
Viewing and Inspecting the Home
Requesting the Loan
Appraising the Property
Closing the Sale
Closing Costs for VA Home Loans
Prequalifying Worksheet

For training opportunities related to processing, underwriting, and closing a Kentucky VA home loan, please click here:

For more general information see the national home loan guaranty site
  • Kentucky VA guaranteed home loans benefit veterans because they do not need to make a down payment and there is no upper limit or required cap on the income of the borrower.  Without a down payment as security against foreclosure, lenders receive a certificate of guaranty from VA.  In essence, as gratitude for honorable military service, the government is vouching for the veteran's trustworthiness to repay his/her debt.  
  • To determine eligibility, a military veteran, active duty person, or a member of the national guard or selected reserves, must submit a VA Form 26-1880 (2 pages) (Form is now in a FILLABLE format - but people with Adobe 5.0 seem to have trouble with it) along with proof of service (DD Form 214, a statement of active duty, or proof of participation in the national guard or reserves) to the VA Eligibility Center, P.O. Box 100034, Attn. COE (@^@), Decatur, GA 30331.  Based on the applicant's length and type of service, VA issues a certificate for each person determined eligible to apply for a VA guaranteed home loan.  Check the status after ten days by calling 1 (888) 768-2132, option 1, between 8:00 - 4:00 Eastern time.
  1. Viewing and Inspecting the Home
  • Kentucky Home buyers usually use the services of state-licensed real estate agents to: determine an affordable price range, suggest certain home features suitable for the buyer, schedule home tours, negotiate sales contacts and hold earnest money deposits.  State-licensed real estate professional can explain the legal requirements for buyers and sellers, and can refer buyers to local lenders and certified home inspectors.  Buyers should accompany their preferred home inspector during the inspection of the property to ask questions about the home's systems.  
  1. Requesting the Loan
  • Kentucky Home buyers may want to contact a lender even before they sign a contract for a home, so that they can be pre-approved to determine their maximum mortgage amount.  Home buyers who wish to obtain a VA guaranteed loan should make sure that the sales contract includes a phrase, sometimes called a financing contingency, making the contract subject to approval for a Kentucky VA guaranteed loan.  Lenders verify and review past and present job and credit history of home applicants, and compare it with VA loan approval guidelines.  If the documents with the loan request cannot be approved, then additional written information must be presented to the lender or the Kentucky VA for further consideration.
  • VA recommends that buyers compare lending terms among several lenders in order to find the best combination of interest rates, discount points, and other negotiable costs for a Kentucky VA guaranteed loan.
  1. Appraising the Property
  • When an eligible veteran contacts a lender to request a Kentucky VA guaranteed loan, the lender obtains a VA number for the request via the Internet.  The lender uses the VA number to monitor progress of the appraisal and loan application.  The lender also sends a VA form to a state-licensed real estate appraiser who will visit the home to give the lender and VA an opinion of the market value of the property.  The appraisal tells the lender and VA whether the property is expected to be adequate collateral for the requested loan.  Neither the appraisal of the home nor the VA guaranty is a warranty from constructional defects and their resulting repair costs.  Builders and brokers can issue warranties for the condition of the home's structure and systems.
  1. Closing the Sale
  • If the loan and home are approved, the buyer needs to contact a state-licensed insurance agent who will provide homeowner coverage to protect the owner and lender from property damage and loss.  Title to the home is usually examined and insured by a title insurance company that may also prepare closing documents and enter them into public records after the closing. After the home is purchased and the loan is originated, the lender usually sells the active loan to another company which will receive the loan payments and pay the real estate taxes and insurance premiums. 
  1. Closing Costs for Kentucky VA Home Loans
  • VA regulates the closing costs that a veteran can be charged when obtaining a VA home loan. The closing cost regulation is designed to keep lenders from charging veterans those closing costs that VA has determined as being beneficial to the lender and not necessarily beneficial to the veteran. For a list of allowable and unallowable closing costs, please follow the link below.

    A List of Allowable and Unallowable VA Closing Costs.    
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  1. Prequalifying Worksheet
  • The Prequalifying Worksheet will give you a general idea of what you can afford, and whether you are within VA underwriting guidelines for approval.  This Prequalifying Worksheet is not a commitment to lend, nor can it be used to determine whether a lender will approve the Kentucky VA loan.   Please note, the Prequalifying Worksheet is in Excel format.   Prequalifying Worksheet    

Documents Needed to Obtain A VA Home Loan

The most important thing to understand is that the loan approval process is 100% dependent on documentation. To insure a smooth transaction, it is imperative that you have all of your documents gathered prior to you initial loan application. The following is a list of all the documents you will need. Please feel free print this screen and use this as a checklist.

VA Loan Eligibility Information

In order to apply for a VA Loan the lender must determine that you are VA Eligible.  You will either need to provide them these VA forms or they can help you obtain them.

Request for your DD214 - If you lost or cannot find your DD214, click here. 
VA Certificate of Eligibility - If you lost or cannot find this form, click here

Lenders can request your VA Certificate of Eligibility.  Many times this can be done the same day you apply or in some cases the VA requires some time to research you request and it may take several weeks. 

Asset/Savings Information

Additional documents may be needed upon review of your file and on a case-by-case scenario. Once you have applied for your mortgage and the lender ha

Joel Lobb (NMLS#57916)Senior  Loan Officer
502-905-3708 cell
502-813-2795 fax

Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*

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